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For those who think that the value of the dollar influences gold, the included gifs shows that the USD/ECU is in a similar MOB situation as Gold.
the first monthly gif from 1979, shows definite reasons for concern.
In April 2000 the EURO broke down from the ABCD falling wedge as well as below the important June 1989 low, indicating much lower prices (in Euro) to come.
We then went to test BOTH lines and are again heading lower following the path of the breakout.(the lower line in the wedge seems to be very strong)
The bottom, have some fib support in addition to what is shown on the gif. Also there is a top from 1993 plus trading area 1981-1983 acting as support. So a bottom COULD be in placeand that's what we are testing. The next gif could give a clue.
The short term gif shows how critical the situation is.
I am not too confident on the EW count but it's possible to "force" into the picture the present move down as an ABC correction. (WC=1.5 x WA)
Watch how we stopped at the all important 78,6% fib retracement line. And also watch the histogram below how fib time clusters add up right at the bottom (5/29).
We're just missing the trigger for going long wit a close stop.
HOWEVER!
I don't like the development of what I presumed, at one time, to be an inverted head and Shoulder pattern. We "should" have moved up, at least in April for a symetric patter. Hence the the move down from April indicates, to me, weaknes and MAY be telling us that the Long term bearish scenario is in process.
If so, the break of the 78.6% area will be swift and painful (as we are "supposed" to have a bottom here - and the stops are in this area).
Such a break would probably have consequences for Gold as well (which was the point I wanted to make).
So if you are into Gold, watch the Dollar today.(it's Fiday )
Very much MOB all over the place it seems like.
regards and have a nice weeknd!
Stig
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